Financial corporations, loans and deposits, 2008

Total loans from Norwegian financial institutions to the different industries amounted to NOK 1 326 billion at the end of 2008. This is an increase of NOK 218 billion, or 19.7 per cent from the end of 2007. The growth from 2006 to 2007 was also high; NOK 185 billion, or 20.1 per cent.

Strong growth in loans from mortgage companies may be caused by the swap agreement

The growth in loans to the different industries was strongest from the mortgage companies, with an increase of 28 per cent. This was followed by the banks with a 21 per cent growth, and finance companies and state lending institutions with a growth of 9 and 5 per cent respectively. By comparison, the growth in 2007 was 4, 24, 10 and 16 per cent respectively.

The sharp increase in industry loans from Norwegian mortgage companies and the decrease in the growth for banks, may be connected with the swap agreement of covered bonds and treasury bills that the Norwegian government issued in October 2008 in an effort to reduce the negative effects of the financial crisis. Large portfolios of both housing loans and industry loans are moved from banks to mortgage companies in order to be used as collateral when issuing covered bonds, which in turn are used in the swap agreement with the government to acquire treasury bills. As a consequence of the portfolio movements, banks and mortgage companies should be viewed together when assessing the Norwegian loan market. From the middle of 2008 up to present day there has been a sharp increase in the establishment of new mortgage companies, and portfolio movements and the effects of these movements will be even more prevalent in the figures for 2009.

The weakening of the Norwegian currency affects the growth in shipping loans

Norwegian banks and mortgage companies account for 89 per cent of the total industry loans. In 2008, these loans increased by 21.5 per cent. This is a small increase in the growth compared to 2007, when the growth was 21.3 per cent. Loans to sea transport abroad and transport via pipelines had the strongest growth, with an increase of almost NOK 44 billion, or 74 per cent. Sea transport abroad, or the shipping industry, was responsible for the entire increase. By comparison, the growth in 2007 was 19 per cent. At the end of 2008, loans to the shipping industry from Norwegian banks and mortgage companies amounted to NOK 103 billion.

A total of 72 per cent of Norwegian banks’ and mortgage companies’ loans to the shipping industry is in foreign currencies. Fluctuations in the rates of exchange affect the value of these loans in the banks’ and mortgage companies’ balance sheets because all amounts are converted to NOK. It was loans in foreign currencies that were responsible for almost all of the increase in shipping loans in 2008. The growth must therefore be viewed in relation to the development in the rates of exchange from the end of 2007 to the end of 2008. Towards the end of 2008, the Norwegian currency weakened quite significantly compared to most foreign currencies, including American dollars and Euro. Corrected for the weakening of the Norwegian currency, the growth in loans to the shipping industry was reduced from 74 to 50 per cent.

Strong growth also in loans to mining and manufacturing, and extraction of crude oil and natural gas

Other industries with strong growth in 2008 were mining and manufacturing, and extraction of crude oil and natural gas, which both had a growth of 48 per cent. By comparison, these loans increased by 20 and 97 per cent in 2007. At the end of 2008, loans to mining and manufacturing, and loans to extraction of crude oil and natural gas amounted to NOK 107 and 27.5 billion respectively.

Tables:

• Table 1 Loans (utilized) by borrower industry
• Table 2 Banks. Deposits from households divided by county. 1997-2007
• Table 3 Banks. Loans to households by borrower county. 1997 - 2007
• Table 4 Loans (utilized) by borrower sector and county, saving banks
• Table 5 Loans (utilized) by borrower sector and county, state lending institutions
• Table 6 Loans (utilized) by borrower sector and county, credit enterprises/mortgage companies
• Table 7 Deposits by depositor industry
• Table 8 Deposits by depositor sector and county, saving banks